for personal use only · shangri-la hotel, sydney, australia at 10.30am, wednesday, 14 november...

Ramsay Health Care Limited

ramsayhealth.com

Annual Report 2018For

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For more informationTo view our interactive Annual Report and for more information on the Company, including market announcements, visit the Investor Centre at: www.ramsayhealth.com

Annual General Meeting 2018The 2018 Annual General Meeting of Ramsay Health Care Limited ABN 57 001 288 768 will be held at the Shangri-La Hotel, Sydney, Australia at 10.30am, Wednesday, 14 November 2018. The full venue details are:

Grand Ballroom 1 Shangri-La Hotel Sydney 176 Cumberland Street The Rocks, Sydney New South Wales Australia

Indicative Key Dates for 2019RESULTS RELEASE DATES:Interim Results – 28 February 2019 Preliminary Final Results – 29 August 2019

DIVIDEND PAYMENT DATES – ORDINARY SHARES:Interim Dividend: 29 March 2019 (Record Date: 7 March 2019) Final Dividend: 30 September 2019 (Record Date: 6 September 2019)

DIVIDEND PAYMENT DATES – CARES:Tuesday, 23 April 2019 (Record Date: 3 April 2019) Monday, 21 October 2019 (Record Date: 3 October 2019)

ANNUAL GENERAL MEETING 2019The 2019 Annual General Meeting of Ramsay Health Care Limited is scheduled to be held on 14 November 2019 (venue & time to be advised)

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ANNUAL REPORT 2018 1

Contents2 The Ramsay Health Care network

3 Hospitals & Facilities

4 FY2018 Highlights

5 Summary of Financial Performance for FY2018

6 Chairman’s Report

8 Managing Director’s Report

10 Board of Directors

14 Corporate Governance Statement

31 Additional Information

33 Corporate Directory

34 Financial ReportFor

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RAMSAY HEALTH CARE LIMITED2

The Ramsay Health Care Network

235Facilities

200Hospital & Community

Franchised Pharmacies

25,500Hospital Beds

64,000Employees3,500,000

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Ramsay Health Care operates 235 hospitals, day surgery centres, treatment facilities, rehabilitation & psychiatric

units & a nursing college across seven countries.

Hospitals & Facilities

United Kingdom

34France

120

Italy

1

Maldives

1

Indonesia

3

Australia

72

Malaysia

3 1nursing college


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FY2018 Highlights

EBIT

$1.008 billion

Revenue

$9.2 billion

144.0 centsALL NUMBERS ARE IN

AUSTRALIAN DOLLARS UNLESS OTHERWISE STATED

Core NPAT

$579.3 million

Core EPS

279.8 cents

Full Year Dividend, Fully Franked

Up 5.4% on previous year5.4%

Group earnings before interest & tax up 6.8% on previous year

6.8%

6.8%

7.0%

7.1%

Core net profit after tax up 6.8% on previous year

Core earnings per share up 7.0% on previous year

Full year dividend (fully franked) up 7.1% on previous year

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Summary of Financial Performance for FY2018

YEAR ENDED 30 JUNE 2018($ millions)

2017($ millions)

Increase

Revenue $9,176.2 $8,702.5 5.4%

EBITDAR $1,839.4 $1,705.9 7.8%

EBITDA $1,395.9 $1,313.9 6.2%

EBIT $1,007.6 $943.4 6.8%

Core NPAT attributable to members of the parent¹ $579.3 $542.7 6.8%

Core EPS (cents per share)2 279.8c 261.4c 7.0%

Final Dividend - fully franked (cents per share) 86.5c 81.5c 6.1%

Full year dividend - fully franked (cents per share) 144.0c 134.5c 7.1%

ALL NUMBERS ARE IN AUSTRALIAN DOLLARS UNLESS OTHERWISE STATED

1 CORE NPAT ATTRIBUTABLE TO MEMBERS OF THE PARENT IS BEFORE NON-CORE ITEMS. THE MINORITY INTERESTS SHARE OF RAMSAY GÉNÉRALE DE SANTÉ CORE NPAT HAS BEEN REMOVED IN ARRIVING AT CORE NPAT ATTRIBUTABLE TO MEMBERS OF THE PARENT

2 CORE EPS IS DERIVED FROM CORE NET PROFIT AFTER CARES DIVIDENDS


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Chairman’s ReportMichael SiddleDear Valued Shareholders…I am pleased to present this 2018 Annual Report for Ramsay Health Care. This year saw a continued focus on healthcare affordability and sustainability in all the markets in which we operate, yet against this backdrop, Ramsay Health Care focused on what has made it successful – an unwavering focus on delivering high quality care to over 3.5 million patients, achieving high engagement with our employees, maintaining strong relationships with doctors, and the application of our cultural values, The Ramsay Way.

Ramsay’s growth has been consistent and sustained over many years and while we experienced some challenges in FY2018, the company delivered solid results demonstrating both the efforts of our management teams and the Company’s long term resilience.

Ramsay recorded a Core Net Profit After Tax (NPAT) of $579.3 million for the year ended 30 June 2018, which was a 6.8% increase on the previous corresponding period. The Company’s statutory reported net profit after tax and after net non-core items of $388.3 million, was down 20.6% on the prior year. Core NPAT delivered Core EPS of 279.8 cents for the year, an increase of 7.0% on the 261.4 cents recorded in the previous corresponding period and in line with the revised guidance provided in June 2018.

Directors are pleased to announce a fully-franked final dividend of 86.5 cents, up 6.1% on the previous corresponding period, taking the full year dividend to 144.0 cents fully-franked, up 7.1% on the prior year. Ramsay Health Care is one of only two companies on the ASX to have raised its dividend every year for the past 18 years.

The sustainability of Ramsay’s performance is based on a disciplined approach to proven operating principles. Our longstanding strategy focusing on organic growth, brownfield developments, growth through acquisition and public/private collaborations, has led to consistent growth and has resulted in Ramsay’s market leading position in the major markets in which we operate as well as being a leader in some markets in specialty areas spanning medical, surgical, maternity, mental health, dialysis, emergency care and rehabilitation.

We have committed to spending more on brownfields to meet the growing and ageing populations we serve, and FY2018 was no different. The Board approved a record $325 million in capacity expansions and redevelopments at our hospitals in Australia which will not only expand our facilities to meet growing demand but enhance the environment of care delivery for our patients. As an example, the new stand-alone, purpose-built psychiatric clinic in Sydney’s north - St Leonards Clinic – is a premier facility which will improve the patient experience and replaces our long standing Northside Clinic, which had outgrown its existing site.

The focus on quality and using our vast clinical capabilities to improve care for patients by our teams around the globe has been a major success this year. Throughout 2018, we used data and registry information to identify and reduce clinical variation, to set new standards in patient care and to drive industry-leading outcomes. The Speaking Up for Patient Safety initiative is being rolled out across three of our global regions with thousands of staff and doctors participating. We have increased our focus on collecting information about the patient experience and benchmarking this across our countries, and we are investing in research to drive best practice.

I would like to take this opportunity to congratulate Craig McNally in his first year as Chief Executive Officer. Craig has brought a new and fresh approach to the position and has made some excellent appointments enhancing the Ramsay global executive team including the appointments of a new Chief Strategy Officer, a new Chief People Officer and Chief Executive appointments in our UK and Asian businesses. This year Craig

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initiatives including the brownfield programme and those developments we have invested in this year, which are aimed at strengthening our business, will continue to contribute strongly to earnings.

At the same time, our strong balance sheet provides headroom for expansion and we have increased our focus on investigating acquisition opportunities and new areas of growth in adjacent businesses. This company has the leadership, market positions, and financial strength to ensure we capitalise on growth opportunities, whilst ensuring that these acquisitions are a strategic fit and meet our strict financial hurdles thereby adding value to our shareholders.

I would like to thank the Ramsay leadership team, our 64,000 staff, the doctors who work with us, and my fellow directors, for your contribution to this company in its operations around the globe during the year. I would also like to thank you, our shareholders, for your continuing support of Ramsay Health Care.

celebrates 30 years with the Company and his capabilities and experience are a great asset to us.

This year we will farewell Patty Akopiantz and Margie Seale as directors. Both Patty and Margie were appointed in 2015 and have each made a significant contribution during their respective time on the Board. Our sincere thanks to both Patty and Margie.

We look forward to welcoming a new director to the Board – Dr Claudia Süssmuth Dyckerhoff PhD – who has extensive global healthcare experience across Europe, Asia and the USA. Dr Süssmuth Dyckerhoff is an external senior advisor with McKinsey & Company, and has led McKinsey’s Asia wide Health Systems and Services Sector where she supported healthcare companies as well as governments after transferring to China. She is a director on the boards of Hoffmann La Roche, Clariant and the med tech start-up Cyrcadia. Her experience in healthcare strategy, privatisation of assets in the health services arena, organisational redesign, capability building and operational performance improvement in hospitals, will be a great addition to the Ramsay Board and we look forward to her commencement as a director.

Looking towards 2019 and beyond, Ramsay Health Care expects the growing and ageing populations to continue to drive demand for healthcare. Our growth

The focus on quality & using our vast clinical capabilities to improve care for patients by our teams around the globe has been a major success this year. Throughout 2018, we used data & registry information to identify & reduce clinical variation, to set new standards in patient care & to drive industry-leading outcomes.

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In my first year as Chief Executive Officer, I am pleased with the Group’s performance and the commitment by our local management teams to assist the Company in achieving what was overall, a good year.

We maintained our focus on strengthening our core and building greater efficiencies. Across all our regions we commenced the rollout of lean initiatives, digitalisation programmes, a new global procurement joint venture and strategies that will ensure we remain the most effective organisation we can be for the future.

More importantly, we are focused on building a sustainable organisation for the long term through ensuring that we are providing a superior patient and doctor experience, and high level clinical excellence. To this end, we have driven an increase in investment in the areas of innovation, customer advocacy and research, right across the Group during the past year.

We have also rolled out several globally recognised programmes including a Vanderbilt University initiated programme on improving patient safety. We have expanded our clinical trials network which, in part, means we can offer the latest cancer treatments to patients. In Australia, we are also very pleased to have achieved two internationally accredited centres of excellence in the past year, demonstrating our clinical leadership. While in France, 10 Ramsay Générale de Santé (RGdS) hospitals made it into the top 50 private hospital listing published by Le Pont and ranked first in 11 specialties out of 44. Ramsay Health Care will continue to ensure our hospitals remain the number one choice for doctors and patients into the future.

In my first year I have visited many of our hospitals around the globe including every one of our Australian facilities. It is obvious as I walk around our hospitals that our local management teams understand the business, have good staff and doctor engagement and are focused on achieving the best outcomes for our patients and the Company overall.

ResultsOur FY2018 results were impacted by the significant downturn in NHS volumes in our UK business as well as softer growth rates in our Australian business and the decision to temporarily slow down the rollout of the Ramsay Pharmacy franchise network while we invest in infrastructure and resources to successfully scale this franchise business for the long term.

Notwithstanding the positive tariff adjustment in the UK which came into effect in April 2018, demand management strategies had a negative impact on NHS volumes in our Ramsay UK hospitals during the year and particularly in the second half.

In Australia, the business performed well despite industry headwinds. Our hospitals maintained admissions growth above the industry growth rate, which is being impacted by affordability concerns and the ongoing negative focus on private health insurance.

EBIT growth in Australia was positively impacted by our disciplined cost management strategies and our focus on achieving further operational efficiencies as well as some one-off benefits.

The normal growth attributable to brownfields in Australia was lower in FY2018 as we concentrated on investing in upgrading existing facilities and additional consulting suites, which will strategically position our hospitals for the long term.

In FY2018, we made significant investments to improve the standard of our amenities and patient experience.

In France, Ramsay Générale de Santé (RGdS) performed in line with expectations given the negative tariff environment. RGdS commenced a programme to centralise non-core hospital functions to a separate shared service centre. This programme, which will take three and a half years, is on track.

Managing Director’s ReportCraig McNally

Ramsay Health Care delivered a good result in FY2018, driven by the quality, diversity and scale of our hospitals, which continue to achieve above market growth, as well as our disciplined cost management focus.

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PeoplePeople are our number one asset and we must ensure that we attract, engage, develop and retain the best people in the organisation. We have excellent regional teams at a country level which are focused on development.

To complement these teams, this year, we have appointed a new position to the Global team – a Group Chief People Officer –tasked with putting in place appropriate succession planning processes and developing a consistent approach to talent assessment and development including the rollout of global leadership development programs and career enhancement opportunities for our leaders.

OutlookThe long term industry fundamentals are continuing to drive the market for healthcare. We continue to expand our business to meet this demand and expect growth initiatives, including our brownfield programme and investments aimed at strengthening our business, to contribute strongly to earnings beyond FY2019.

Most importantly, Ramsay Health Care remains absolutely focused on ensuring that we continue to deliver the best outcomes for our patients, that we are focused on improving the customer experience, that we maintain the highest level of engagement and respect for our doctors, that we develop our workforce for the future, and that we continue to drive clinical excellence and innovation. Paul Ramsay’s motto was “if we look after our patients and our staff and be the best at that, the rest will follow”. We are committed to upholding this in everything we do.

I would like to thank the staff and doctors throughout the organisation for your commitment to the organisation and the Board of Directors for your support during my first year.

The Ramsay Pharmacy Franchise Network continues to expand and the number of pharmacy franchises in our network now equals 54.

In terms of procurement we continue to deliver savings. The joint venture with the US-based Ascension Health, announced during the year, commenced operations.

Growth StrategyDespite the challenging circumstances which are currently impacting the rate of growth, long term industry fundamentals are positive and our growth levers have not changed. Organic growth, brownfield investment, public/private collaborations and acquisitions remain a major focus while we are also concentrating on broadening our service base in adjacent businesses.

Ramsay’s robust balance sheet and strong cash flow generation continue to provide the Company with the flexibility to fund the continuing demand for brownfield capacity expansion, future acquisitions and ongoing working capital needs. At 30 June 2018, the Group Consolidated Leverage Ratio was 2.3 times, well within our internal parameters.

In FY2019, the Australian brownfield programme will deliver $242 million in completed projects.

The healthcare market is evolving and this requires innovation including operational excellence via process and cost optimisation, as well as a strong commitment to delivering the highest quality services, leading technology and proactive advocacy to customers, specialists and staff.

We are focused on differentiating our business and have increased our investment in a number of quality, digital, innovation and research initiatives, which are aimed at ensuring we achieve industry-leading patient outcomes in all markets in which we operate. In addition, we are exploring new models of care which will enhance our offering to patients and clinicians, both in hospital and beyond the hospital walls.

The Company remains committed to expanding its global portfolio and will continue to search for opportunities in new and existing markets that are a strategic fit and meet the Company’s rigorous financial hurdles.

Managing Director’s Report

In my first year I have visited many of our hospitals around the globe including every one of our Australian facilities. It is obvious as I walk around our hospitals that our local management teams understand the business, have good staff & doctor engagement & are focused on achieving the best outcomes for our patients & the Company overall.

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10

Michael S SiddleCHAIRMAN – Appointed 27/05/14 (Appointed as a Director 26/5/75)

Mr Michael Siddle was appointed as Chairman of the Company on 27 May 2014, having formerly been Deputy Chairman for 17 years and a founding director. He has built up significant knowledge of the business and the private hospital industry after starting with the Company in 1968. Mr Siddle has extensive experience in the management of private hospitals and has been integrally involved in Ramsay Health Care’s successful expansion through construction, mergers and acquisitions. He serves as a member of the Company’s Remuneration Committee and is Chair of the Nomination Committee.

Mr Siddle was a director of Prime Media Group Limited, one of Australia’s largest regional television and radio operators, from April 1985 to November 2015.

Mr Siddle is also a trustee of the Paul Ramsay Foundation.

During the last three years Mr Siddle has also served as a director of the following listed company:• Prime Media Group Limited (Retired November 2015)

Peter J Evans FCADEPUTY CHAIRMAN – Appointed 27/05/14 (Appointed as a Director 29/12/90)

Mr Peter Evans was appointed as Deputy Chairman of the Company on 27 May 2014, having formerly served as a Non-Executive Director since his appointment to the Board in 1990. Mr Evans began working with Ramsay Health Care in 1969. He is a Chartered Accountant who was in public practice for over 20 years with predecessor firms of KPMG. He has specialised in the financial management of hospitals and has had extensive experience in the health care field for 45 years. Mr Evans is Chairman of both the Company’s Audit and Risk Management Committees and a member of the Remuneration Committee.

Mr Evans is also a trustee of the Paul Ramsay Foundation and has been actively involved with several other charitable organisations over many years.

Board of Directors

RAMSAY HEALTH CARE LIMITED

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Craig R McNally MANAGING DIRECTOR & CEO – Appointed 03/07/17Mr Craig McNally was appointed Managing Director and Chief Executive Officer of Ramsay Health Care (Ramsay) on 3 July 2017, after serving seven years with Ramsay Health Care as Chief Operating Officer and 22 years prior to this in various roles including Head of Global Strategy and European Operations.

Mr McNally is one of Ramsay’s longest serving Executives having commenced with the Company in 1988. He was initially employed as a Hospital Executive in Ramsay’s Sydney-based mental health facilities, before taking over divisional responsibility for acute medical and surgical hospitals in the early nineties.

In 1995, he became Ramsay’s Head of Strategic Development, and for the last two decades has been responsible for the development and implementation of Ramsay’s growth strategy including brownfield expansions, international market assessments, mergers and acquisitions and new business strategies. As the Company’s chief negotiator and deal-maker he has been at the forefront of all the major acquisitions and deals completed by Ramsay Health Care. His unique ability to assess the opportunities and risks associated with new business ventures and to evaluate their ‘strategic fit’, as well as his sound judgement and insight, has ensured the Company’s successful growth both domestically and internationally.

In his role as head of Ramsay’s UK and European business, Mr McNally has been responsible for leading these teams through the challenging acquisition and merger phases and ensuring their successful integration with Ramsay Health Care and adoption of The Ramsay Way culture.

Bruce R Soden B.Comm CA FAICDFINANCE DIRECTOR & CFO – Appointed 02 /01/97Mr Bruce Soden, a chartered accountant, is Group Finance Director and Chief Financial Officer of the Company, a role he has held since early 1997. Mr Soden is responsible for all financial operations and corporate governance functions of the business including treasury, banking and finance, legal and company secretariat, investor relations and group accounting and taxation. Over his extensive time with the Group, Mr Soden has led the company’s capital management strategy through many critical milestones including the acquisition of the privatised Department of Veteran Affairs hospitals Hollywood (1994) and Greenslopes (1995), Ramsay’s listing on the ASX in 1997, the company-transforming acquisition of Affinity Health Care in 2005 and all debt and equity raisings.Mr Soden is also a member of the Board’s Risk Management Committee.Mr Soden is a Director of Ramsay Générale de Santé, a publicly listed hospital operator in France in which Ramsay Health Care (UK) Limited has a controlling interest, and he is also a Director of Ramsay Sime Darby Health Care, the Company’s joint venture with Sime Darby.Prior to being appointed Group Finance Director in 1997, Mr Soden was Finance Director and Chief Financial Officer of Ramsay’s operating entities. Prior to that he spent four years based in New Orleans as Director and Senior Vice President of Ramsay Health Care Inc, a listed US health care company.Before joining Ramsay in 1987, Mr Soden was a financial consultant for a major global accounting firm for 11 years.


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Board of Directors…continued

Kerry C D Roxburgh B.Comm MBA MESAANON-EXECUTIVE DIRECTOR – Appointed 03/07/97

Mr Kerry Roxburgh is a Practitioner Member of the Stockbrokers Association of Australia.

He is currently the Lead Independent non-executive Director of Ramsay Health Care Ltd, and a non-executive director of the Medical Indemnity Protection Society and of MIPS Insurance Ltd.

He is Chairman of Eclipx Group Limited and of Tyro Payments Ltd.

He is also a member of the Advisory Board of AON Risk Solutions in Australia.

In 2000 he completed a 3 year term as CEO of E*TRADE Australia (a business that he co-founded in 1997), becoming its non-executive Chairman until June 2007, when it was acquired by the ANZ Bank. Prior to this appointment he was an Executive Director of Hong Kong Bank of Australia Group (now HSBC Australia Ltd) where for 10 years from 1986, he held various positions including Head of Corporate Finance and Executive Chairman of the group’s stockbroker, James Capel Australia. Until 1986 Mr Roxburgh was in practice for more than 20 years as a Chartered Accountant.

Until 31 December 2015, he was Chairman of Tasman Cargo Airlines Pty Ltd and Deputy Chairman of Marshall Investments Pty. Ltd.

In addition to Ramsay Health Care Limited, during the last three years Mr Roxburgh also served as a director of the following listed company:• Eclipx Group Limited (Appointed March 2015) (Currently Chairman)

Margaret L Seale BA FAICDNON-EXECUTIVE DIRECTOR – Appointed 28/04/15

Ms Margaret (Margie) Seale is a Non-Executive Director and serves as a member of the Risk Management Committee. Ms Seale also has current directorships at Telstra Corporation Limited, Scentre Group Limited and Australian Pacific (Holdings) Pty Limited. She is a member of the Audit Committee for Telstra and a member of each of the Audit and Risk and Human Resources Committees at Scentre Group.

Ms Seale is a professional non-executive director with 25 years’ experience in senior executive roles in Australia and overseas in the global publishing, health and consumer goods industries, doing business in Asia and across multinational markets.

In her most recent executive role, Ms Seale was Managing Director of Random House Australia and New Zealand and President, Asia Development for Random House globally. She stepped down as Managing Director in November, 2012 but remained on the board as a non executive director, then non executive Chair of the merged company Penguin Random House until 2016. During her time at Random House, the publishing industry transitioned from an entirely print world to a mixed print and digital environment. Prior to this she held national sales and marketing roles in a number of industries.

Ms Seale was educated at the University of Sydney.

During the last three years, Ms Seale has also served as a Director of the following listed companies:• Telstra Corporation Limited (Appointed May 2012)• Scentre Group Limited (Appointed February 2016)• Bank of Queensland Limited (Resigned June 2018)

Rod H McGeoch AO LLB MAICDNON-EXECUTIVE DIRECTOR – Appointed 03/07/97

Mr Rod McGeoch AO is a past Chairman of Corrs Chambers Westgarth, a leading Australian law firm and has been a solicitor for 48 years. He was Chief Executive of Sydney's successful bid for the 2000 Olympic Games and served on the Sydney Organising Committee for the Olympic Games until November 1998. Mr McGeoch is also a past Chairman of Sky City Entertainment Group Limited.

Currently Mr McGeoch is Chairman of BGP Holdidngs Plc Malta and BGP Investments S.a.r.l. Luxembourg, Chairman of Vantage Private Equity Growth Limited, Chairman of Chubb Australia Insurance Limited, Director of Corporacion America Airports S.A and is also Deputy Chairman of the Sydney Cricket & Sports Ground Trust. Mr McGeoch also holds a number of honorary positions. In 1990 he was awarded Membership of the Order of Australia for services to Law and the Community and in 2013, was also awarded an Officer of the Order of Australia for distinguished service to the Community through contributions to a range of organisations and to sport, particularly through leadership in securing the Sydney Olympic Games. Mr McGeoch was Co-Chairman of the Australian New Zealand Leadership Forum until 2017 and is also a director of Destination NSW. In January 2013, Mr McGeoch was appointed Honorary Consul General of Luxembourg in Australia.

During the last three years Mr McGeoch has also served as a director of the following listed company:• BGP Holdings Plc Malta and BGP Investment S.a.r.l Luxembourg (Appointed November 2009) (Currently Chairman)

Patricia E Akopiantz BA MBANON-EXECUTIVE DIRECTOR – Appointed 28/04/15

Ms Patricia Akopiantz has over 30 years’ experience in consumer-facing businesses in Australia and overseas. She has been a non-executive director for the last 14 years and has served on numerous boards including Coles Group, AXA Asia Pacific and Energy Australia.

Previously, she was with McKinsey & Company where she helped lead the Retail and Consumer Goods Practice and advised a range of clients on strategy. Her executive career included roles as General Manager Marketing at David Jones and Vice President for an American apparel manufacturer. She has an MBA from Harvard Business School.

In addition to Ramsay Health Care, Ms Akopiantz currently serves as a non-executive director of AMP Limited. She is also the Chairman of AMP Bank Limited, Chairman of AMP’s People and Remuneration Committee and a Member of AMP Limited’s Nominations and Governance, and the Risk committees. She is Deputy Chair of the Belvoir Theatre Company.

During the last three years, Ms Akopiantz has also served as a director of the following listed company:• AMP Limited (Appointed March 2011)

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David Thodey AONON-EXECUTIVE DIRECTOR – Appointed 28/11/17

David Thodey AO is a global business leader who has had a strong executive career in the technology and telecommunications industries, with more than 30 years of experience creating brand and shareholder value.

In addition to being a non-executive Director of Ramsay Health Care, Mr Thodey is currently Chairman of Australia’s national scientific research agency, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Chairman of Jobs for NSW focused on job creation in NSW, as well as an Ambassador for business events in NSW. He is also the Chairman of the NSW Government’s Quantum Computing Fund Advisory Panel.

Mr Thodey is on the Advisory Boards of SquarePeg Capital and Unified Healthcare Group (UHG) and is on the Investment Committee of Evans and Partners Global Disruption Fund.

He also had a successful career as CEO of Telstra, Australia’s leading telecommunications and information services company, and prior to that he was CEO of IBM.

Mr Thodey holds a Bachelor of Arts in Anthropology and English from Victoria University, Wellington, New Zealand, attended the Kellogg School of Management postgraduate General Management Program at Northwestern University in Chicago, USA, and was awarded an Honorary Doctorate in Science and Technology from Deakin University in 2016 and an Honorary Doctorate of Business from University of Technology Sydney in 2018.

Mr Thodey is also a Fellow of the Australian Academy of Technological Sciences and Engineering (ATSE) and the Australian Institute of Company Directors (AICD).

He was awarded an Order of Australia in 2017 for his service to business and the promotion of ethical leadership and workplace diversity.

John D C O’Grady LLB FAICDGROUP GENERAL COUNSEL & COMPANY SECRETARY – Appointed 23/01/07

Mr John O’Grady has a background as a corporate and commercial lawyer and is admitted to practice in New South Wales. He is a Fellow of the Australian Institute of Company Directors (AICD). He has served as a non-executive director of a number of boards, including the Defence Housing Authority and the Major Events Board in South Australia. Prior to joining Ramsay in January 2007, he was in private practice with a strong corporate governance focus and experience in contract negotiation, finance and corporate law.

Mr O’Grady heads up the Global Legal team and has responsibility for coordinating Risk Management throughout the Group. He also provides input into all major acquisitions of the Ramsay Group globally and advises the Board and Executive on corporate governance.

Mr O’Grady also has Group responsibility for all company secretarial functions, including liaising with the ASX, ASIC and other regulatory bodies.

Christopher P RexFORMER MANAGING DIRECTOR & CEO – Appointed 01/07/08 & retired 02/07/2017

I Patrick S Grier AM MAICDNON-EXECUTIVE DIRECTOR – Appointed 01/07/08 & retired 16/11/2017

Retired Board Members

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Corporate Governance StatementRamsay Health Care Limited (Company) is committed to delivering high quality health care services, long-term sustainable growth and shareholder returns. The Board recognises the importance of good governance in achieving these corporate objectives, in discharging its responsibilities to all stakeholders and in executing the broader role of the Company as a good corporate citizen.The Company’s governance framework is designed to ensure that the Company is effectively managed, that statutory obligations are met and that the culture of personal and corporate integrity – The Ramsay Way – is reinforced. The Company remains steadfast in its commitment to maintaining the culture and principles of The Ramsay Way across all aspects of its business, honouring the architect of The Ramsay Way, the late Mr Paul Ramsay AO.

This Statement outlines the Company’s governance framework, policies and procedures as at 30 June 2018 (unless otherwise stated) in accordance with the 3rd Edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX Recommendations) applicable at the date of this report. The table at the end of this section indicates where specific ASX Recommendations are addressed in this Statement.

1. The Role of the BoardThe Board is committed to effectively representing and promoting the Company, thereby adding long-term value to all shareholders. The Board is accountable to shareholders for the oversight of the Company’s business and affairs and, as such, is responsible for the overall strategy, governance and performance of the Company.

To clarify the roles and responsibilities of directors and management, and to assist the Board in discharging its responsibilities, the Company has established a governance framework which sets out the functions reserved to the Board and provides for the delegation of functions to Board Committees and to senior management as considered appropriate. These are set out in the Board Charter, which was last reviewed and updated in FY2017, and can be found in the Corporate Governance section of the Company’s website (www.ramsayhealth.com/Investors/CorporateGovernance).

The Company’s Statement of Delegated Authorities, which was most recently updated and approved by the Board in February 2018, will continue to be reviewed as required.F

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2. Governance Framework: The Board & its Standing CommitteesThe governance framework in place is designed to promote and foster accountability, both of the Board and senior executives, to the Company and its shareholders. The diagram below summarises the Company’s governance framework, including the functions reserved for the Board and those carried out by the four standing Board Committees.

BOARDFormally delegates certain functions to Board Committees and to management via formal Board and Committee charters. Directly retains responsibility for a range of matters including:

• driving the Company's strategic direction;• monitoring the performance of the Managing Director and approving senior management remuneration policies;• reporting to shareholders;• monitoring the effectiveness of and compliance with policies governing the operation of the Company;• monitoring strategic risk management systems and the integrity of internal control and reporting systems;• reviewing and approving the annual operating budget;• determining dividend policy and approving dividends;• approving decisions concerning the capital of the Company; and• the appointment of the Managing Director and succession planning.

Audit CommitteeKey functions: Overseeing and reviewing:

• the financial reporting process

• the existence and maintenance of internal controls and accounting systems

• the scope and effectiveness of the external audit

• the appointment, performance and remuneration of external auditors

Risk Management CommitteeKey functions: Overseeing and driving improvement in risk management practices in relation to patient safety, workplace health and safety and the operating environment through (among other things) reviewing and/or approving:

• the risk management, internal compliance and control policies and procedures

• the design and implementation of risk management framework

Remuneration CommitteeKey functions: Reviewing and making recommendations on:

• executive remuneration and incentive policy

• level of remuneration for non-executive directors

• Managing Director and other senior executive remuneration packages

• design of all equity-based plans

Nomination CommitteeKey functions: Reviewing and making recommendations on:

• Board size and composition

• criteria for Board membership

• appointment, re-election and succession

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DELEGATION ACCOUNTABILITY

DELEGATION ACCOUNTABILITY


Managing Director, Finance Director & other Senior Executives

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The four standing Board Committees assist the Board in the execution of its responsibilities. Each Committee operates under a specific charter, which can be found in the Corporate Governance section of the Company’s website (www.ramsayhealth.com/Investors/CorporateGovernance).

The applicable composition requirements and membership of each of the Board Committees as at the date of this Corporate Governance Statement are set out below:

Board Committee Composition requirements Membership

Audit Committee Comprised of at least three members, all of whom are Non-Executive Directors and a majority of whom are independent. Chaired by an independent Non-Executive Director.

Mr Peter Evans (Chair), Mr Kerry Roxburgh and Ms Patricia Akopiantz.

Risk Management Committee

Comprised of at least three members, two of whom must be Non-Executive Directors with at least one also being a member of the Audit Committee. Chaired by an independent Non-Executive Director.

Non-Executive DirectorsMr Peter Evans (Chair), Mr Kerry Roxburgh, Ms Margaret Seale and Mr David Thodey AO

Executive Directors & Senior ManagementMr Craig McNally (Managing Director & CEO), Mr Bruce Soden (Group Finance Director & CFO), Ms Carmel Monaghan (Group Chief of Staff), Mr John O’Grady (Group General Counsel, Company Secretary & Chief Risk Officer), Professor John Horvath AO (Group Chief Medical Officer) and Mr Andrew Wearne (Global Chief Audit Executive).

Remuneration Committee

Comprised of at least three members, all of whom are Non-Executive Directors and a majority of whom are independent. Chaired by an independent Non-Executive Director.

Mr Rod McGeoch AO (Chair), Mr Michael Siddle, Mr Peter Evans and Ms Patricia Akopiantz.

Nomination Committee

Comprised of at least three members, a majority of whom are independent Non-Executive Directors. Chaired by an independent Non-Executive Director.

Mr Michael Siddle (Chair), Mr Rod McGeoch AO, Mr Kerry Roxburgh and Ms Patricia Akopiantz.

The number of scheduled Board and Committee meetings held during the year ended 30 June 2018 and the number of meetings attended by each of the directors in office during FY2018 is set out in the table below:

Board1 Audit Committee Risk Management Committee

Remuneration Committee

Nomination Committee

Attended Attended (Eligible to attend)

Attended (Eligible to attend)



M. S. Siddle 16 (16) 6 (6) 6 (6)

P. J. Evans 16 (16) 8 (8) 4 (4) 6 (6)

C. R. McNally 16 (16) 4 (4)

B. R. Soden 16 (16) 4 (4)

P. E. Akopiantz2 16 (16) 8 (8) 4 (4) 6 (6)

I. P. S. Grier AM3 3 (5) 1 (1)

R. H. McGeoch AO 16 (16) 6 (6) 6 (6)

K. C. D. Roxburgh 16 (16) 8 (8) 4 (4) 6 (6)

M. L. Seale 16 (16) 4 (4)

D. I. Thodey AO4 10 (10) 2 (2)

1 INCLUDES SPECIAL BOARD MEETINGS.2 MS AKOPIANTZ WAS APPOINTED TO THE REMUNERATION COMMITTEE IN FEBRUARY 2018.3 MR GRIER AM RETIRED FROM THE BOARD AT THE CONCLUSION OF THE COMPANY’S 2017 AGM ON 16 NOVEMBER 2017.4 MR THODEY AO WAS APPOINTED TO THE BOARD ON 28 NOVEMBER 2017.

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3. Board CompositionThe Board currently consists of seven Non-Executive and two Executive Directors. All of the seven Non-Executive Directors are classified as independent for the purposes of the ASX Recommendations (see section 5). Details of the background, particular qualifications, expertise and period of service of each Director are set out in the Board of Directors section of this Annual Report.

The Nomination Committee is responsible for reviewing and making recommendations to the Board on its membership, including recommendations on the size and composition of the Board, the appointment and re-election of Directors and, where necessary, proposing candidates for consideration by the Board. The Nomination Committee must have regard to the factors set out in the Nomination Committee Charter, including that the Board should comprise Directors with a broad range of skills, expertise and experience from a diverse range of backgrounds in accordance with the Diversity Policy.

The Company aims to maintain a Board that comprises directors who are able to effectively understand and manage the issues arising in the Company’s business, review and challenge the performance of management and optimise the Company’s performance. To this end, the Nomination Committee annually assesses the composition of the Board by reference to its Board Skills Matrix.

The appointment of Mr David Thodey AO as a director in November 2017 was made by the Board after considering the Board Skills Matrix. As noted in the Company’s FY2017 Corporate Governance Statement, the Board stated that it would favourably consider any candidate to fill a casual vacancy that had strong CEO and international experience and technology/digital expertise. The appointment of Mr Thodey AO has strengthened the Board’s collective expertise and experience in these areas.

During FY2018, the Board again undertook its annual skills/experiences evaluation to better inform the Board of the specific skills and experiences relevant to its role, the depth of such skills and experiences and how important those skills and experiences are to the success of the Board and the Company. As part of this evaluation, each Director was asked to assess the extent of their skills/experiences in respect of specific areas on a Level 1 (Expert/Extensive Experience) to Level 5 (limited/no experience) basis.

The results of the 2018 Evaluation continue to demonstrate that the Board is comprised of members with an extensive, diverse and relevant skill-set with depth of experience in all key areas.

The following table sets out the various skills/experience that comprise the Company’s Board Skills Matrix by describing each relevant skill/experience and the number of Directors that have at least a solid amount of experience (i.e. Level 3) in respect of that skill or experience (noting that there are nine Directors in total, including the Executive Directors).

Skill & Experience No. of Directors possessing relevant skill/ experience (total no. of directors is 9)

Sectors/Activities

Health Care Senior executive or directorship experience in operating private hospitals or the health care sector generally

6

Mergers & Acquisitions (M&A) Senior executive or directorship strategic & operational experience in M&A and business partnerships, including joint ventures

9

Operational experience in Major Business CEO or senior executive or directorship experience in a major business focusing on business operations

9

International Experience

Multinational/Cross-Border Experience (including Asia &/or Europe) Senior executive or directorship experience in a business with multinational operations

9

Specific Skills & Experience

Strategy Senior executive or directorship experience in developing or implementing corporate strategy

9

Political Relationships Experience with understanding, developing & maintaining long term political relationships

5

Public Policy & Interface with Government Departments Experience in public and regulatory policy; developing and maintaining relationships with multiple levels of government

2

Capital management & Finance CFO, senior accounting/finance practitioner or equivalent experience in financial analysis, interpretation, accounting and reporting, capital markets, corporate finance, financial risk management and internal financial controls

7

Technology/IT Knowledge or experience in the use and governance of critical information technology infrastructure and applications

5

Disruption Managing disruption and structuring business for future growth in industry sectors impacted by digital trends, technology or other disruptive factors

4

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Skill & Experience No. of Directors possessing relevant skill/ experience (total no. of directors is 9)

Specific Skills & Experience…cont.

Human relations/People & Culture Experience in setting & communicating corporate culture, motivation of key human capital talent, overseeing management and evaluating the suitability of CEOs and other key executives

8

Corporate Governance Knowledge and experience in best practice corporate governance

8

Consumer Goods/Retail Senior executive experience in consumer goods or retail industry (including online)

3

Risk management Experience in best practice risk management practices

6

Marketing/communications Senior executive or directorship experience in or oversight of marketing and communications

8

Workplace Health & Safety Experience in workplace health and safety practices

5

Legal & Regulatory Legal qualifications and/or regulatory experience

5

As part of the FY2018 Board Skills Evaluation, Directors were asked how important each of the above skills and experiences are to the success of the Board and the Company in achieving its strategic goals. Those skills and experiences deemed to be most important to the Company continue to be experience in Health Care, Major Business Operations, Corporate Strategy, Public Policy and Interface with Government Departments, Multinational Businesses and Political Relationships.

In considering future Board appointments to fill any casual vacancies that might arise, the Board and Nomination Committee will use the above matrix to assist in the identification of the Board’s strengths and where its existing skills and experience may best be enhanced or supplemented. In considering any future candidate to fill a casual vacancy, candidates with multi-national and/or public policy and interface with government departments experience will be considered favourably.

The Nomination Committee’s current membership is set out earlier in this Statement and the independence of the members is discussed below. Details of Nomination Committee meetings and attendance by each Committee member are also contained earlier in this Statement.

4. Appointment, Induction & TrainingAn offer of a Board appointment must be made by the Chairman only after having consulted with all Directors and with the approval of the Board as a whole. In accordance with the Company’s Constitution, a Director appointed by the Board holds office until the conclusion of the next AGM, at which he or she will be eligible for election. Prior to appointment, new Directors receive a letter of appointment which sets out the terms of their appointment. Directors are also encouraged to sign a deed of indemnity, access and insurance.

The Company has written agreements with each of its Directors, including the Managing Director and the Group Finance Director, setting out the terms of their appointment.

The Nomination Committee ensures that:• appropriate background checks are carried out prior to the Board appointing a new Director or putting to shareholders a candidate for

election. In respect of the recent appointment of Mr Thodey AO in November 2017, appropriate checks were undertaken in accordance with Recommendation 1.2 of the ASX Recommendations; and

• shareholders are provided with all material information in the Company’s possession that is relevant to a decision on whether or not to elect or re-elect a Director, most relevantly through the Notice of Meeting and Annual Report.

The Nomination Committee is also responsible for implementing an effective induction process for new Directors and regularly reviewing its effectiveness. New Directors are required to attend and complete a structured Director Induction Programme, which includes site visits to the Company’s hospitals and meetings with key executives. In addition, Directors are provided with ongoing professional development and training programmes to enable them to develop and maintain their skills and knowledge.

5. Director IndependenceThe Board considers that it is able to exercise its judgement in an independent and unfettered manner, provide independent and effective oversight of management and is highly effective in promoting the interests of shareholders as a whole.

All members of the Board, whether independent Directors or not, exercise independent judgement in making decisions in the best interests of the Company. When considering matters at Board meetings, questioning and debate amongst the Directors is encouraged and no individual Director (or small group of Directors) is permitted to dominate the Board’s discussions or decision making.

The Board determines the independence status of each Director on an annual basis. In doing so, the Board considers the matters described in Box 2.3 of the ASX Recommendations. The Board may determine that a Director is independent notwithstanding the existence of an

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interest, position, association or relationship of a kind described in Box 2.3. As such, the Company assesses independence on a case by case basis, having regard to the extent to which any relevant interest, position, association or relationship may materially interfere with the Director’s ability to exercise unfettered and independent judgement in the discharge of their responsibilities and duties.

At the date of this Statement, Paul Ramsay Holdings Pty Limited (PRH) continues to be the Company’s largest shareholder. Mr Siddle (Chairman) and Mr Peter Evans (Deputy Chairman) are directors of PRH and Paul Ramsay Ancillary Fund Pty Limited (PRAF), which is the registered holder of 100% of the shares in PRH and the trustee of the Paul Ramsay Foundation. The Paul Ramsay Foundation is the ultimately beneficiary of the PRH shares held by PRAF and therefore the RHC shares held by PRH. PRAF, in its capacity as the corporate trustee of the Paul Ramsay Foundation and registered holder of the shares in PRH, has again indicated that it intends for PRH to remain as a significant long-term shareholder in the Company.

Following the Board’s recent annual review of each Director’s independence, it was concluded that Mr Siddle’s and Mr Evans’ respective roles as Directors of Paul Ramsay Holdings Pty Limited and as directors of the corporate trustee of the Paul Ramsay Foundation have not interfered with, and should not be perceived to interfere with, the independent exercise of their judgement. In reaching this conclusion, the Board took into account the same factors taken into account in assessing Mr Siddle’s and Mr Evans’ independence in previous years (see page 19 of Ramsay’s 2017 Annual Report.

In the case of Ms Patricia Akopiantz, Mr Rod McGeoch AO, Mr Kerry Roxburgh, Ms Margaret Seale and Mr David Thodey AO, the Board does not consider there to be any relationships that could materially interfere with or could reasonably be perceived to materially interfere with their ability to exercise unfettered and independent judgement in the discharge of their responsibilities and duties.

Further, after due consideration, the Board has formed the view that Messrs Siddle, Evans, McGeoch AO and Roxburgh continue to be independent notwithstanding their respective tenure.

The Board therefore considers all Non-Executive Directors to be independent.

The remaining Directors are regarded by the Board as not independent for the reasons outlined below. In each case, the Board is satisfied that each of these Director makes a valuable contribution to the work of the Board and has particular skills and experience that enhance the effectiveness of the Board.• The Managing Director & CEO, Mr Craig McNally – as a current executive of the Company, Mr McNally is not independent.• The Group Finance Director, Mr Bruce Soden – as a current executive of the Company, Mr Soden is not independent.

Accordingly, the Board currently comprises a majority of independent Non-Executive Directors and throughout the reporting period, the Company is satisfied that the Board operated independently of management and was highly effective in promoting the best interests of shareholders as a whole.

The independence of each Director will again be considered in FY2019, including by reference to the proposed 4th edition of ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations if promulgated during FY2019.

6. ChairmanMr Siddle continues in his role as Chairman of the Board. He has considerable knowledge and experience in the management of the Company, private hospitals generally and in property development. Mr Siddle was the Deputy Chairman of the Board for many years and, in order to ensure continuity and stability of this highly successful Board, was appointed Chairman of the Company following the passing of Mr Paul Ramsay AO in May 2014. Given this highly relevant and valuable experience, the Board considers that the interests of the shareholders are best met by the continued contribution of Mr Siddle as Chairman.

7. Lead Independent DirectorTo enhance the independent functioning of the Board, in 2012 the Board resolved to appoint Mr Kerry Roxburgh as Lead Independent Director, updating the Board Charter to formally recognise this new role. The key functions of the Lead Independent Director are to:• ensure that any conflicts of interest (or potential conflicts of interest) between the Company’s major shareholder and the Company are

identified and appropriately managed;• promote awareness of the importance of independent judgements in the Board’s decision-making;• provide leadership to the other independent Non-Executive Directors and support them in presenting diverse perspectives on issues

being considered by the Board; and• promote constructive interaction between the independent Non-Executive Directors and all other Directors.

8. Access to Independent AdviceDirectors are entitled to seek independent professional advice at the expense of the Company as required in the furtherance of their duties and in relation to their functions (including their Board Committee functions), subject to prior consultation with, and approval of, the Chairman or Deputy Chairman. Directors have consistently indicated in their evaluations that they consider they have adequate opportunity to access such advice.

9. Evaluating Board, Committee & Director PerformanceDuring FY2018, the Board commissioned an independent third party evaluation of the Board, the Directors and the Board Committees, with the assessor’s findings and recommendations communicated to the Board in late FY2018.

Among other things, the independent evaluation indicated that the Board had been functioning well but that there were areas for enhancement/optimization. As a result, the Board has established a non-standing Corporate Governance Work Group, which is comprised

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of Ms Akopiantz (Chair), Mr David Thodey AO and Mr John O’Grady. The purpose of the Corporate Governance Work Group is to make recommendations to optimize the Board’s governance, structure and processes and to help facilitate the implementation of some of the recommendations arising from the independent evaluation.

In accordance with good governance practices, the Board will engage an external consultant to undertake independent evaluations of the Board, the Directors and the Board Committees on a regular basis.

10. The Company SecretaryMr John O’Grady is the Group General Counsel, Company Secretary and Chief Risk Officer. His role as Company Secretary is by Board appointment and he is directly accountable to the Board, through the Chair, in relation to all matters relating to the proper functioning of the Board. All Directors have direct access to the Company Secretary.

The role of Company Secretary is set out in more detail in the Company’s Board Charter.

Details of Mr O’Grady’s experience and qualifications are set out in the Board of Directors’ section of this Annual Report.

11. Senior ExecutivesThe Board delegates the responsibility for the day-to-day management of the Company to the Managing Director, who is assisted by the senior executives who report to him.

During FY2018, Mr McNally made a number of appointments to his executive team, including the appointments of Mr Olivier Chretian as the Group Chief Strategy Officer, Ms Colleen Harris as the Group Chief People Officer and Dr Andrew Jones and the new CEO of Ramsay UK. The diagram below sets out details of the senior executives reporting directly to the Managing Director as at the date of this Corporate Governance Statement.

The Managing Director must consult with the Chairman or Deputy Chairman on any matters which the Managing Director considers are of such a sensitive, extraordinary or strategic nature as to warrant the attention of the Board, regardless of value. The authorisation thresholds for the control of expenditure and capital commitments by the Managing Director and senior executives are established and defined in the Company’s Statement of Delegated Authorities. This Statement was reviewed and updated in FY2018 to optimise the function and decision making of the executive as the Company continues to grow and expand geographically, whilst maintaining appropriate oversight by the Board.

Subject to these policy limits and the directions of the Board or Audit Committee, the Managing Director may sub-delegate the day-to-day running of the Company to the senior executive team.

12. Performance of Senior ExecutivesThe terms of employment of Mr McNally and each newly appointed senior executive are formalised in a written services agreement. For other senior executives that have been with the Company for a considerable period of time, the terms of their employment are not formalised in written services agreements. The Company considers that the unique working environment and culture developed over many years, principally founded on ‘The Ramsay Way’ and exemplified through the longevity and low turnover of the Company’s executive team, is such that written agreements with those longstanding senior executives are unnecessary at this time.

However, each executive’s position description and the combination of financial and non-financial key performance indicators (KPIs) used to monitor senior executive performance are recorded in writing. Details of the KPIs used for Mr McNally in FY2018 and examples of the KPIs for other senior executives are set out in the FY2018 Remuneration Report.

The Managing Director’s performance is formally assessed on an annual basis. The Managing Director’s KPIs are reviewed and set annually by the Board on the basis of recommendations made by the Remuneration Committee at the commencement of the financial year. The Remuneration Committee carefully evaluates the Managing Director’s performance against those KPIs and makes recommendations to the Board for final decision.

An annual assessment of the performance of all other senior executives is undertaken by the Board on the basis of recommendations by the Managing Director, who conducts performance reviews in relation to each senior executive.

A performance evaluation for all senior executives, including the Managing Director, was undertaken in the reporting period in accordance with the process disclosed above.

Managing DirectorCraig McNally

Chief Financial Officer

Bruce Soden

Group Chief Strategy OfficerOlivier

Chretien

CEO Ramsay Australia

Danny Sims

CEO Ramsay

Générale De Santé

Pascal Roché

CEO Ramsay UKDr Andrew

Jones

Group Chief People Officer

Colleen Harris

Global Chief Audit ExecutiveAndrew Wearne

Group Chief of Staff

Carmel Monaghan

Group Chief Medical Officer

John Horvath

CEO Ramsay Sime

DarbyGreg Brown

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1 ‘SENIOR EXECUTIVE’ POSITIONS ARE THOSE REPORTING DIRECTLY TO CRAIG MCNALLY, MANAGING DIRECTOR & CEO 2 ‘SENIOR MANAGEMENT’ POSITIONS IN THIS CONTEXT ARE THOSE DIRECTLY REPORTING TO THE RAMSAY AUSTRALIA, RAMSAY UK & RAMSAY GÉNÉRALE DE SANTÉ CEOS. 3 ‘SENIOR MANAGEMENT’ POSITIONS IN THIS CONTEXT ARE THOSE DIRECTLY REPORTING TO THE RAMSAY AUSTRALIA, RAMSAY UK, RAMSAY GÉNÉRALE DE SANTÉ & RAMSAY SIME DARBY CEOS.

13. DiversityThe Company is proud of the considerable diversity that exists throughout the organisation’s workforce. The Company strives to create a culture that embraces the differences of ideas, perspectives and experiences that diversity brings in recognition of the positive impact a diverse workforce has on the Company’s overall performance.

During FY2018, the Board approved a revised Group Diversity and Inclusion Policy, which has been promulgated throughout the business. The Company also has in place very comprehensive and well-developed Workplace Diversity Guidelines for Employees, including diversity criteria in its Recruitment and Selection Guidelines.

In each of its geographical business units, the Company has in place a Flexible Work Practices Policy to promote balance of work and life responsibilities and interests, such as family and carers’, study, community and cultural needs, with the aim of accommodating employees’ needs for flexibility subject to meeting the operational needs of the business. This is exemplified by the fact that a significant number of the Company’s employees are part time with child and/or elderly care and other responsibilities and desire to obtain effective work life balance in order to maintain and progress their careers.

The Company is proud of the strong representation of women throughout the organisation. In 2018 women comprised over 80% of employees in each of the Company’s operations in Australia, France, the United Kingdom and Asia. As at 30 June 2018, women occupied 20% of senior executive1 positions and more than 50% of the Group’s senior management positions2 .

These figures do not reflect the level of female management representation in our hospital facilities, which is generally exceptional. For example, in Ramsay Australia, Ramsay UK and Ramsay Sime Darby (Ramsay’s 50:50 joint venture with Sime Darby in Asia), more than 50% of hospital and facility CEOs/General Managers are women while in Ramsay Géneralé de Santé 35% of hospital and facility CEOs are women.

Leadership programmes are designed to support and prepare employees for their first move into supervisory roles through their progression to senior management and leadership positions. The diversity profile of applicants and successful candidates is assessed to ensure that such leadership programmes is broadly reflective of our workforce.

Since 2015, the Company has had two female Board members, now accounting for 22% of Board members. The Board is conscious of the importance of female representation on the Board, particularly in light of the fact that women represent a substantial proportion of the Group’s overall workforce, clinicians and patients.

In order to facilitate greater gender diversity in leadership roles, the Diversity & Inclusion Policy provides that diversity and inclusion is a business imperative that assists to drive business results, enhance Ramsay’s reputation and attract, recruit, engage and retain a diverse group of talented people. The Policy requires meaningful measurable objectives for achieving gender diversity to be set, with a particular emphasis on senior levels. Regular reporting on the progress against the measurable objectives to the People & Remuneration Committee will occur.

Updates on the Company’s progress against those objectives during FY2018 and the measurable objectives set for FY2019 and adopted by the Board are set out in the table below.

Measurable Diversity Objective Timeframe Progress in FY2018 Relevance for FY2019

Expand our talent identification, Leadership Development and succession planning processes to ensure high potential females are encouraged to consider leadership and management roles and to prepare them to take on executive management roles.

Ongoing A new Executive Leadership Programme is being developed to further develop our executive talent. Part of the design of this programme will consider the importance of diversity.

Following our succession planning session, an audit is completed to consider the diversity within our succession pools.

The Executive Leadership Programme and succession process will assist us to increase gender diversity at the most senior levels.

Align the internal mentoring programme (which aims to increase opportunities for female employees in management or professional positions to have access to senior managers as mentors) with identified forecasted shortages in key management positions.

Ongoing The Company continued to offer tailored professional development opportunities to senior management including access to mentoring and executive coaching.

The mentoring programme will continue in FY2019 with a focus on identifying mentees in areas of forecasted shortages in key management positions.

Aim to increase the percentage of women in executive and senior management positions subject to the identification of candidates with appropriate skills.

Ongoing More than 50% of the Group’s senior management positions3 , including 70% in Ramsay Australia, are currently held by women.

The Company will continue to seek opportunities for high calibre female managers in senior management positions in FY2019 and beyond.F

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Measurable Diversity Objective Timeframe Progress in FY2018 Relevance for FY2019

Ensure online Discrimination, Bullying and Harassment training modules are completed by all senior managers.

Ongoing New employees must complete the online Discrimination, Bullying and Harassment module as part of their induction programme. Further, the module is scheduled for completion by all managers bi-annually.

Compliance will again be monitored in FY2019 with a target of 100% compliance.

Review of flexible and part-time work arrangements to endeavour to ensure that roles are appropriate to maintain career development.

Ongoing Senior managers continue to support and encourage managers to consider requests for flexibility from employees wherever practicably possible. The number of flexible working arrangements continues to increase each year.

Flexible working options are supported by the national Flexible Work Practices policy.

Flexible work arrangements will continue to be supported and encouraged throughout FY2019.

In relation to the Australian business, the Company has again been assessed as compliant with the Workplace Gender Equality Act 2012.

Gender Pay EqualityDuring FY2018, a gender pay equity audit was performed for the fixed and STI components of Hospital Executive Remuneration across Australia. The comparison demonstrated that there is no gender based pay issues within the Hospital Executive roles of Ramsay Australia with respect to the fixed and STI remuneration components. Further, in relation to employees more broadly, the majority of Ramsay’s employees are covered by Enterprise Bargaining Agreements, which are designed so that people are paid equally for the same role at the same level.

Ramsay UK also publishes an annual Gender Pay Report in accordance with UK legislative requirements. The latest Report is available at https://www.ramsayhealth.co.uk/legal-and-regulatory

14. Ethical & Responsible BehaviourCode of Conduct & Whistleblower PolicyThe Company places the highest value on ethical and responsible behaviour and has established a Code of Conduct for all Directors, officers and employees as to:• the practices necessary to maintain confidence in the Company’s integrity;• their legal obligations from time to time and the reasonable expectations of the shareholders; and• the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Code of Conduct, which is available in the Sustainability section of the Company’s website (www.ramsayhealth.com/Sustainability/Social/Workforce%20Standards), is the subject of periodic review to ensure that it covers all relevant issues and sets standards consistent with the Company’s commitment to ethical and responsible behaviours.

Employees are encouraged to report any concerns regarding serious misbehaviour including theft, fraud, bribery, breach of policies, dishonesty, harassment, bullying, unlawful discrimination, unethical or negligent behaviour, workplace safety hazards and medical negligence through the Ramsay Whistleblower Programme. The Programme has been implemented in all Ramsay facilities in Australia and the UK and includes an independent hotline service operated by Deloitte to encourage anonymous disclosures by providing a mechanism by which employees may confidentially register complaints with an organisation independent of the Company and which will in turn refer complaints to senior managers of the Company for investigation. All reports are monitored by the Whistleblower Committee, which reports to the Audit Committee.

In relation to France, Ramsay Géneralé de Santé has during FY2018 established a Whistleblower Policy having regard to recent legislative changes in France (‘Loi Sapin 2’). In relation to the Company’s Asian joint venture, Ramsay Sime Darby, a formal whistleblowing policy is also in place.

Securities Trading PolicyIn line with ASX Listing Rule 12.9, the Company has in place a Securities Trading Policy. The Securities Trading Policy was last reviewed and updated during FY2017, with the updated Securities Trading Policy approved by the Board on 28 April 2017.

Under the Securities Trading Policy, all employees are prohibited from dealing (or causing or encouraging a third party to deal) in Company securities at any time while they are in possession of price-sensitive information and from dealing in securities of other listed companies where they obtain price sensitive information in relation to that other company in the course of their employment.

One of the key changes that was made in the new the Securities Trading Policy is that the Company has adopted “trading blackouts”, rather than trading windows, for “Restricted Employees” to trade. Under the “trading blackouts”, “Restricted Employees” (including Directors, officers and senior executives) and their families and trusts or companies over which they have influence or control are prohibited from trading directly or indirectly in Company securities during the two blackout periods, being:• the period from the close of trading on the ASX on 30 June each year, or if that date is not a trading day, the last trading day before that

day, until the day following the announcement to ASX of the full-year results;• the period from the close of trading on the ASX on 31 December each year, or if that date is not a trading day, the last trading day before

that day, until the day following the announcement to ASX of the half-year results; and• any other period that the Board specifies from time to time.

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The only exception to this prohibition is where the Restricted Employee has “exceptional circumstances” and has obtained written approval to deal in Company securities outside the windows in accordance with the process set out in the Securities Trading Policy.

Restricted Employees are permitted to trade at any time other than during the “trading blackout” periods set out above, subject to receiving clearance to deal in accordance with the process set out in the Securities Trading Policy.

A copy of the Company’s Securities Trading Policy is available in the Corporate Governance section of the Company’s website (www.ramsayhealth.com/Investors/CorporateGovernance).

Global Anti-Bribery & Corruption PolicyTo supplement the prohibition on bribery, or acceptance by staff of gifts that are beyond general commercial practice or common courtesy under the Code of Conduct and the Whistleblower Policy, the Company has in place a Global Anti-Bribery and Corruption Policy, which was last reviewed and updated during FY2017. This Global Policy, which builds on and consolidates the Company’s previous anti-bribery and corruption policies, now applies to all of the Company’s related bodies corporate worldwide. The Policy also sets out the Company’s expectations of its third party suppliers, and includes a requirement for the Company’s employees to take steps to satisfy themselves that the Company is dealing with suppliers that do not engage in bribery/corruption.

The Company has also adopted a Global Gifts & Hospitality Policy. This Policy supplements the Global Anti-Bribery & Corruption Policy’s guidance on accepting and offering Gifts and Hospitality by establishing:• monetary thresholds for Gifts and Hospitality that, if exceeded, must be approved before a Gift or Hospitality may be accepted; and• protocols in relation to the giving of Gifts and/or Hospitality by or on behalf of Ramsay.

The Board, through the Risk Management Committee, has primary responsibility for ensuring that both the Global Anti-Bribery and Corruption Policy and Global Gifts & Hospitality Policy are complied with. The Risk Management Committee has further delegated responsibility to test compliance with our Global Anti Bribery & Corruption Policy to the Global Chief Audit Executive, who reports to the Risk Management Committee and the Audit Committee on a quarterly basis. The controls in ensuring compliance with all key Ramsay policies, including the Anti-Bribery and Corruption Policy, form part of the Internal Audit Plan that is monitored and approved by the Audit Committee.

The Company will monitor the progress of the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 (Cth) through parliament. If passed, the Company will review and amend its Global Anti-Bribery and Corruption Policy, if necessary, in light of the amendments ultimately passed.

Global Human Rights & Labour Policy (Modern Slavery Act Statement)The Board has adopted the Ramsay Human Rights & Labour Policy. The Policy, which applies to all of the Company’s businesses worldwide, sets out (among other things) the Company’s commitment to only engage workers who have capacity, are of legal age and have a free will and consent to work. This Global Policy also sets out the steps that must be taken by the Company’s business units to uphold this commitment.

Each year, the Modern Slavery Act 2015 (UK) requires the Company to prepare a Statement on the steps it has taken to mitigate the risk of slavery or human trafficking in its business or supply chain. The Company’s FY2018 Modern Slavery Act Statement can be viewed via a link on the Company’s homepage, www.ramsayhealth.com, under the ‘Sustainability’ tab. The Company is mindful of the recently enacted Modern Slavery Act 2018 (NSW) and its obligations under this legislation. The Company is also monitoring the Modern Slavery Bill 2018 (Cth) and what will be required of it should the legislation ultimately be passed.

Other PoliciesThe Company also has in place a Code of Conduct for Agents, Manufacturers and Suppliers with whom the Company does business, which has been distributed internally and progressively implemented as a term of key supplier contracts as those contracts are entered, reviewed or renewed.

Copies of the Company’s Whistleblower Policy, Global Anti Bribery and Corruption Policy, Human Rights & Labour Policy and Code of Conduct for Agents, Manufacturers and Suppliers are available in the Sustainability section of the Company’s website (www.ramsayhealth.com/Sustainability/Social/Workforce%20Standards).

SustainabilityCentral to The Ramsay Way and the Company’s desire to retain its status as one of the world’s most sustainable organisations is its commitment to the environment. The Company has in place an Environmental Sustainability Policy, setting out the principles underpinning the Company’s commitment towards environmental sustainability which are intended to form part of, and to support, all Ramsay activities. The Company’s Environmental Management System (EMS) aims to implement the Policy and procedures developed under it, and to establish individual roles, a reporting structure and a programme for monitoring and auditing performance.

The Company has been included in the FTSE4Good Global Index every year since 2011. The FTSE4Good Global Index is a global index identifying companies that demonstrate strong environmental, social and governance practices (ESG), measured against globally recognised standards. Inclusion in the 2018 FTSE4Good Index demonstrates the Company’s sustained commitment to global ESG standards. Further details of the Company’s environmental indicators can be found in the Company’s Performance and Sustainability Reports for Australia and the UK, published on the Company’s website (www.ramsayhealth.com/Sustainability/Environment). The Performance and Sustainability Reports also detail the Company’s performance using indicators of patient safety and quality, workplace health and safety, human resources and governance and social indicators.

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15. Financial ReportingAudit CommitteeThe Audit Committee is responsible for assisting the Board in discharging its responsibilities to safeguard the integrity of the Company’s and the Group’s financial reporting and the system of internal control. A key component of the Committee’s role is to provide appropriate advice and recommendations to the Board to assist the Board to fulfil its responsibilities in regard to financial reporting, the internal control environment and audit management across the Group.

The Audit Committee Charter, which was reviewed and updated in FY2018, takes into account the roles and responsibilities of the Audit Committee, the Company’s internal audit structure (which has developed in recent years with the appointment of a Global Chief Audit Executive) as well as contemporary governance practices. The Audit Committee Charter includes details on the appointment and oversight of the external auditor and the Global Chief Audit Executive.

The Audit Committee’s current membership, the independence of the members and details of Audit Committee meetings and attendance by each Committee member are set out earlier in this Corporate Governance Statement. Furthermore, the relevant experience and qualifications of the Audit Committee members are set out in the Board of Directors’ section of this Annual Report.

Internal AuditThe Company has established an Internal Audit function to assist in the management of the Company’s risks. Internal Audit undertakes internal reviews of risk management by conducting a series of audits on the systems, processes and controls within the Company. A risk-based plan is agreed with management and the Audit Committee on an annual basis and may include reviews in the areas of financial risk, operational risk, strategic risk and compliance with regulatory regimes, laws and standards. The results of these reviews are reported to the Audit Committee and Risk Management Committee by the Global Chief Audit Executive.

In last year’s Corporate Governance Statement, the Company advised that the Audit Committee had commissioned an independent review of the Company’s Internal Audit function. Following this review and during FY2018, the Company appointed Mr Andrew Wearne as the new Global Chief Audit Executive. Mr Wearne is a senior executive with over 20 years’ corporate governance experience in ASX top 30 companies in Europe, Asia and the South Pacific regions.

AssurancePrior to the Board’s approval of the Company’s FY2018 financial statements and in accordance with s295A of the Corporations Act 2001 (Cth) and the ASX Recommendations, the Managing Director and the Group Finance Director provided a declaration to the Board that:• in their opinion, the Company’s financial records have been properly maintained and that the financial statements comply with the

appropriate accounting standards, give a true and fair view of the financial position and performance of the Company; and• their opinion has been formed on the basis of a sound system of risk management internal control which is operating effectively.

A similar declaration was provided by the Managing Director and the Group Finance Director prior to the Board’s approval of the Company’s HY2018 financial information.

The Company’s external auditor, Ernst & Young, will again attend the Company’s 2018 AGM and be available to answer shareholder questions concerning the audit of the Company’s FY2018 financial statements.

TaxAs part of the Company’s commitment to transparency and being a responsible tax payer, the Company has voluntarily disclosed against the Australian Board of Taxation’s Voluntary Tax Transparency Code. A copy of the Company’s Australian Tax Governance Report for FY2017 can be found on the Company’s website (http://www.ramsayhealth.com/-/media/Documents/RHC/Investor/documents/RHC-Australian-Tax-Governance-Report.pdf?la=en).

16. Risk ManagementThe Company has developed a governance structure for oversight of risk whereby material business risks can be identified at an operational level and managed and reported, ultimately to Board level, via the Risk Management and Audit Committees. The structure also allows for top-down management of risks identified at Board or Board Committee level. The Company’s system of reporting encompasses both formal and informal channels.

The Board has ultimate responsibility for the oversight of enterprise risk management and satisfying itself that the risk management framework is sufficiently robust and sound. The Board has allocated responsibility for managing the Company’s risks as follows:• The Board is responsible for managing strategic and political risks (including those associated with merger and acquisition activity).• The Audit Committee is responsible for managing direct financial risks to the Company and for matters relating to tax and accounting.• The Risk Management Committee is responsible for managing all other enterprise risks, with particular focus on clinical, workplace health

and safety, operational, technology and environmental risks.

Strategic & Operational RisksStrategic and operational risks are considered at least annually by all operating divisions as part of the annual strategic planning, forecasting and budgeting process. Each facility is responsible for the development and maintenance of a risk management plan identifying material risks, developing strategies for dealing with those risks and developing and testing controls.

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During FY2018, the Risk Management Committee reviewed the Company’s Strategic and Operational Risk Profile. Material strategic and operational risks were identified and assessed and the effectiveness of relevant risk mitigation strategies were scrutinised. The Risk Management Committee was satisfied that appropriate controls were in place to address these risks. The Strategic and Operational Risk Profile will continue to be reviewed annually.

The Company’s risk management frameworkThe Company has in place a Risk Management Framework which is consistent with the definition of an ‘appropriate framework’ in Standard AS/NZS ISO 31000:2009 Principles and Guidelines for Risk Management.

The Risk Management Framework:• provides a Group-wide approach which outlines the structure and policies applicable to the proactive identification, assessment,

management, reporting and oversight of risks, particularly material business risks;• encompasses all areas of risk with the capacity to adversely affect the business of the Group, such as strategic, financial, patient safety,

workplace health and safety, the operating environment and legal risks;• emphasises a collaborative approach by all stakeholders to the identification of risks, the importance of clear communication of initiatives

and strategies to manage identified risk and reinforcement of compliance with such initiatives as an integral part of corporate culture; and• provides guidance on risk treatment and prioritisation.

Our material business risks, including economic risks, together with our approach to managing those risks, are outlined in the Operating and Financial Review section of our 2018 Annual Report.

The Company does not consider that it has any material environmental or social sustainability risks (as those terms are defined in the ASX Recommendations).

Risk Management CommitteeThe Risk Management Committee helps drive a positive culture towards risk management that promotes open disclosure and quality improvement in risk management activities in these key areas.

The Risk Management Committee Charter provides that the objectives of the Committee is to oversee and drive improvement in risk management practices in:• patient safety;• workplace health and safety; and• the Company’s operating environment (e.g. IT/cybersecurity, building and facilities and regulatory compliance).

There are currently ten (10) members on the Risk Management Committee comprising a mix of Non-Executive Directors (four), executive Directors (two) and senior executives/management personnel (four), including Professor John Horvath AO as the Company’s Chief Medical Officer. Professor Horvath assists the Company in developing and implementing innovative clinical programmes, which enhance the Company’s performance and reputation as a global leader in the delivery of safe and quality care to patients.

Given the nature of the risks inherent in owning hospitals on an international scale, the Board has decided that it is in the Company’s best interests for the Risk Management Committee to include a strong senior executive/management presence to ensure that the Risk Management Committee has the necessary technical and industry knowledge available to it at all times. Despite the Risk Management Committee not being comprised of a majority of independent Directors, the Board considers that it operates efficiently and effectively in bringing transparent, focused and professional judgement in overseeing the Company’s risk management framework.

The current membership, independence of, and details of Risk Management Committee meetings and attendance by each Director member of the Risk Management Committee are set out earlier in this Corporate Governance Statement. Further, the relevant experience and qualifications of the Director members is set out in the Board of Directors section of this Annual Report.

The Risk Management Committee reviews the Risk Management Framework at least annually. Following its FY2018 review, the Risk Management Committee is satisfied that the Risk Management Framework continues to be sound.

Risk Sub-CommitteesThe Board has an integrated risk management reporting framework that is befitting of a transnational organisation.

Risk management structures have been established in respect of each of the Company’s Australian, France, UK, Malaysian and Indonesian businesses. Risk management subcommittees have also been established in Ramsay Australia, Ramsay Générale de Santé and Ramsay UK. Risks relating to the Company’s Asian joint-venture are reported to the board of Ramsay Sime Darby Health Care Sdn Bhd, as part of the joint venture arrangements with Sime Darby.

Each country/region reports to the Risk Management Committee in writing at least on a quarterly basis and in a consistent format. These reports cover the management of risks and analysis of trends relating to (among other things) clinical governance, workplace health and safety, cybersecurity and other material enterprise risks.

Further, within each country/region, sub-committees have been established with specialised responsibilities: e.g., in Australia sub-committees have been established to oversee the management of risk in relation to clinical governance risk and workplace health and safety and culture risk, as well as Ramsay Pharmacy, the Company’s retail pharmacy franchise business. These sub-committees, which report to the relevant country/region body are an important part of the Company’s risk management and governance strategy as they each oversee and report on their respective area of specialisation and responsibility.

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17. CommunicationWith the MarketThe Company is committed to complying with its continuous disclosure obligations under the ASX Listing Rules and Corporations Act and to ensuring that its shareholders are kept well-informed of all major developments affecting the Company’s state of affairs.

The Company has a Continuous Disclosure Policy. This Policy creates a framework for compliance with relevant disclosure obligations and establishes the accountability of senior executives for achieving compliance. More specifically, the Policy:• explains the Company’s obligations under ASX Listing Rule 3.1 and the Corporations Act;• establishes internal processes for reporting of information considered to be potentially price-sensitive and for consideration of such

information by the Company Secretary, the Disclosure Committee and (where necessary) the Board;• establishes processes for the disclosure of price sensitive information;• establishes internal processes for briefing of analysts, investor and media groups, responding to market speculation, leaks and rumours

and calling trading halts where appropriate to avoid trading occurring in an uninformed market; and• delegates to the Disclosure Committee and Company Secretary the authority to release information or make disclosures to the ASX and

responsibility for decisions regarding price sensitive information, coordinating disclosures, establishing and monitoring procedures under this Policy and making recommendations to the Board on any necessary updates to the Policy.

With ShareholdersThe Company is always mindful of the importance of communicating effectively with its shareholders including by allowing shareholders access to information about the Company and its governance on its website.

A formal Communications Policy has been adopted by the Board in relation to the provision of information to shareholders, the media and the wider community.

The Communications Policy establishes internal protocols and authorisations for communications with media (including media inquiries and releases at Company and facility level), disclosure of corporate and confidential information and communications with shareholders and investors. The Policy is to be read in conjunction with the Continuous Disclosure Policy described above, which deals with the disclosure of price-sensitive information.

The Company’s investor relations programme comprises the following mechanisms, which together facilitate two-way communications with shareholders and ensure that shareholders are kept fully informed and able to participate effectively at general meetings:• financial reports, market reports and ASX releases are posted on the Investor Centre on the Company’s website;• relevant documents relating to the Company’s governance arrangements are made available in the Corporate Governance section of the

Company’s website;• shareholders are able to send emails to, and can elect to receive email alerts from, the Company’s share registry manager facility, which is

provided by Boardroom Pty Limited;• an investor email inquiry facility has been established to ensure timely responses by the Company Secretary (for individual shareholders)

or the Group Finance Director (for institutional shareholders) to all investor questions;• correspondence from the Chairman is sent to shareholders for significant events (including via the Company’s website and email alerts);

and• participation by shareholders at the AGM is actively encouraged. For example, shareholders are encouraged to submit questions to the

Company’s auditor prior to the AGM, with those questions answered at the AGM.

18. RemunerationThe Board has established a Remuneration Committee which, in accordance with the Remuneration Committee Charter, is responsible for reviewing and making recommendations to the Board in respect of:• executive remuneration and incentive policy;• remuneration of the Company’s key management personnel, Company Secretary and any other senior executive reporting to the

Managing Director;• equity based incentive plans;• superannuation arrangements;• remuneration by gender and strategies or changes required to address any pay gap identified;• recruitment, retention, performance measurement and termination policies and procedures for Non-Executive Directors, the Managing

Director and any other Executive Director, the Company Secretary and all senior executives reporting directly to the Managing Director; and

• the disclosure of remuneration in the Company’s public materials including ASX filings and the annual report.

The Remuneration Committee Charter will be updated during FY2019.

The Remuneration Committee’s current membership, the independence of the members and details of Remuneration Committee meetings and attendance by each Committee member are set out earlier in this Corporate Governance Statement.

The Company distinguishes the structure of Non-Executive Directors’ remuneration from that of executive Directors and senior executives.

The Company’s policy is to reward executives with a combination of fixed, performance-based and equity-based incentives. To drive improvements in shareholder value, a significant proportion of remuneration for Executive Directors and senior executives is 'at risk' based on delivery of returns to shareholders. Conversely, to preserve independence and impartiality, no element of Non-Executive Director remuneration is ‘at risk’ (i.e. it is not based on the performance of the Company).

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Non-Executive Directors receive Board and Committee fees that are set having regard to the responsibilities and risks of the role and market competitiveness. However, to create alignment between the interests of Non-Executive Directors and shareholders, Non-Executive Directors are encouraged to hold shares in the Company. Many of the Non-Executive Directors have acquired shares in the Company and hold them in their own right.

Further, following shareholder approval at the 2015 AGM, the Company implemented the Non-Executive Director Share Rights Plan under which Non-Executive Directors are granted share rights that convert into ordinary shares as part of their annual board fees. Shareholders will again be asked to approve the terms of the Non-Executive Director Share Rights Plan at the 2018 AGM.

Further details about the Non-Executive Director’s Share Rights Plan are contained in the FY2018 Remuneration Report.

The Company’s Securities Trading Policy prohibits hedging arrangements, dealing in derivatives or any other arrangements that vary the economic risk related to the Company’s securities. This includes hedging or arrangements that have the effect of limiting the economic risk in connection with unvested securities issued under an employee or Director option or share plan.

For details of the Company’s remuneration structure, please refer to the Remuneration Report.

This Statement has been approved by the Board and is current as at 30 June 2018.

ASX Corporate Governance Council’s Principles

ASX Principle Reference4 Compliance as at the date of this Statement

Principle 1 Lay solid foundations for management & oversight

1.1 A listed entity should disclose:(a) the respective roles and responsibilities of its board and

management; and(b) those matters expressly reserved to the board and those delegated

to management.

1, 2 and 11Yes

Yes

1.2 A listed entity should:(a) undertake appropriate checks before appointing a person, or putting

forward to security holders a candidate for election, as a director; and(b) provide security holders with all material information in its possession

relevant to a decision on whether or not to elect or re-elect a director.

4Yes

Yes

1.3 A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

4 and 12 Yes for all Directors. The Managing Director and the recent senior executive appointments have formal services contracts.

1.4 The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

10 Yes

1.5 A listed entity should:(a) have a diversity policy which includes requirements for the board or a

relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity’s progress in achieving them;

(b) disclose that policy or a summary of it; and(c) disclose as at the end of each reporting period the measurable

objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity’s diversity policy and its progress towards achieving them and either:(1) the respective proportions of men and women on the board, in

senior executive positions and across the whole organisation (including how the entity has defined “senior executive” for these purposes); or

(2) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in and published under that Act.

13Yes

YesYes

Yes

Yes

1.6 A listed entity should:(a) have and disclose a process for periodically evaluating the

performance of the board, its committees and individual directors; and

(b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

9Yes

Yes

4 ALL REFERENCES ARE TO SECTIONS OF THIS CORPORATE GOVERNANCE STATEMENT UNLESS OTHERWISE STATED

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Principle 1 Lay solid foundations for management & oversight

1.7 A listed entity should:(a) have and disclose a process for periodically evaluating the

performance of its senior executives; and(b) disclose, in relation to each reporting period, whether a performance

evaluation was undertaken in the reporting period in accordance with that process.

12Yes

Yes

Principle 2 Structure the Board to add value

2.1 The board of a listed entity should:(a) have a nomination committee which:

(1) has at least three members, a majority of whom are independent directors; and

(2) is chaired by an independent director,and disclose:(3) the charter of the committee;(4) the members of the committee; and(5) as at the end of each reporting period, the number of times the

committee met throughout the period and the individual attendances of the members at those meetings; or

(b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

2 and 3

Yes

Yes

YesYesYes

N/A

2.2 A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

3 Yes

2.3 A listed entity should disclose:(a) the names of the directors considered by the board to be

independent directors;(b) if a director has an interest, position, association or relationship of the

type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and

(c) the length of service of each director.

5 and Board of Directors’ Section (for length of service details)

Yes

Yes

Yes

2.4 A majority of the board of a listed entity should be independent directors. 5 Yes

2.5 The chair of the board of a listed entity should be an independent director and, in particular, should not be the same person as the CEO of the entity.

6 Yes

2.6 A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

4 Yes

Principle 3 Promote ethical & responsible decision-making

3.1 A listed entity should:(a) have a code of conduct for its directors, senior executives and

employees; and(b) disclose that code or a summary of it.

14Yes

Yes


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Principle 4 Safeguard integrity in corporate reporting

4.1 The board of a listed entity should:(a) have an audit committee which:

(1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and

(2) is chaired by an independent director, who is not the chair of the board,

and disclose:(3) the charter of the committee;(4) the relevant qualifications and experience of the members of

the committee; and(5) in relation to each reporting period, the number of times the


(b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.

2 and 15

Yes

Yes

YesYes

Yes

N/A

4.2 The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

15 Yes

4.3 A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

15 Yes

Principle 5 Make timely & balanced disclosure

5.1 A listed entity should:(a) have a written policy for complying with its continuous disclosure

obligations under the Listing Rules; and(b) disclose that policy or a summary of it.

17Yes

Yes

Principle 6 Respect the rights of shareholders

6.1 A listed entity should provide information about itself and its governance to investors via its website.

17 Yes

6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

17 Yes

6.3 A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.

17 Yes

6.4 A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.

17 Yes


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Principle 7 Recognise & manage risk

7.1 The board of a listed entity should:(a) have a committee or committees to oversee risk, each of which:


(2) is chaired by an independent director, and disclose:

(3) the charter of the committee;(4) the members of the committee; and(5) as at the end of each reporting period, the number of times the


(b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.

16Partially yes, insofar as the Committee has at least three independent members. Executive membership means that a majority are not independent directors.Yes

YesYesYes

N/A

7.2 The board or a committee of the board should:(a) review the entity’s risk management framework at least annually to

satisfy itself that it continues to be sound; and(b) disclose, in relation to each reporting period, whether such a review

has taken place.

16Yes

Yes

7.3 A listed entity should disclose:(a) if it has an internal audit function, how the function is structured and

what role it performs; or(b) if it does not have an internal audit function, that fact and the

processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.

15Yes

N/A

7.4 A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.

16 and Directors Report

Yes

Principle 8 Remunerate fairly & responsibly

8.1 The board of a listed entity should:(a) have a remuneration committee which:


(2) is chaired by an independent director,and disclose:(3) the charter of the committee;(4) the members of the committee; and(5) as at the end of each reporting period, the number of times the


(b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive

19

Yes

Yes

YesYesYes

N/A

8.2 A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.

19 and the Remuner-ation Report

Yes

8.3 A listed entity which has an equity-based remuneration scheme should:(a) have a policy on whether participants are permitted to enter into

transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and

(b) disclose that policy or a summary of it.

19Yes

Yes


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(a) Distribution of Shareholders – Ordinary Shareholders

Size of HoldingNumber of

Shareholders Ordinary Shares % of Issued Capital

1 – 1,000 77,637 21,852,588 10.811,001 – 5,000 10,358 20,827,072 10.315,001 – 10,000 751 5,175,104 2.5610,001 – 100,000 284 6,315,303 3.13100,001 and over 43 147,911,185 73.19Totals 89,073 202,081,252 100%

(b) Less than marketable parcels of ordinary sharesThe number of shareholdings held in less than marketable parcels is 1,132 holders, for a total of 6,530 ordinary shares.

(c) 20 Largest Shareholders – Ordinary Shareholders

NameNumber of fully paid

Ordinary Shares % of Issued Capital

1. Paul Ramsay Holdings Pty Limited 64,999,269 32.162. HSBC Custody Nominees (Australia) Limited 31,661,390 15.673. J P Morgan Nominees Australia Limited 18,822,825 9.314. Citicorp Nominees Pty Limited 5,368,607 2.665. National Nominees Limited 4,439,532 2.206. Woolwich Investments Pty Limited (The Siddle Family Trust) 3,750,000 1.867. Australian Executor Trustee Limited 2,512,441 1.248. BNP Paribas Nominees Pty Limited (Agency Lending DRP A/c) 2,428,955 1.209. Custodial Services Limited (Beneficiaries Holding A/c) 1,805,955 0.8910. Argo Investments Limited 1,666,319 0.8311. Australian Foundation Investment Company Limited 1,415,000 0.7012. BNP Paribas Nominees Pty Limited (DRP) 1,071,014 0.5313. IOOF Investment Management Limited (IPS Super A/C) 659,932 0.3314. Citicorp Nominees Pty Limited (Colonial First State Invest A/c) 618,963 0.3115. HSBC Custody Nominees (Australia) Limited

(NT-COMMONWEALTH SUPER CORP A/C)608,257 0.30

16. Netwealth Investments Limited (Wrap Services A/c) 536,224 0.2617. BKI Investment Company Limited 409,500 0.2018. UBS Nominees Pty Limited 399,469 0.2019. BNP Paribas Nominees Pty Limited 398,713 0.2020. AMP Life Limited 378,172 0.19

Totals 143,950,537 71.24%

(d) Substantial ShareholdersThe names of the Substantial Shareholders listed in the Company’s Register as at 11 September 2018

ShareholderNumber of fully paid

Ordinary Shares% of Issued

Capital

Paul Ramsay Foundation Pty Limited as trustee for the Paul Ramsay Foundation 64,999,269 32.16%

(e) Voting RightsIn accordance with the Constitution each member present at a meeting whether in person, or by proxy, or by power of attorney, or by a duly authorised representative in the case of a corporate member, shall have one vote on a show of hands, and one vote for each fully paid ordinary share, on a poll.

Additional information required under ASX Listing Rule 4.10 and not shown elsewhere in this Annual Report is as follows. This information is current as at 11 September 2018.

Additional InformationF

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(f) On-market purchasesDuring FY2018 the Company purchased 800,000 ordinary shares on-market for the purposes of its employee and Non-Executive Director share plans (including to satisfy the entitlements of holders of vested performance rights to acquire shares under the Executive Performance Rights Plan), at an average price per ordinary share of $65.33.

(g) Distribution of Convertible Adjustable Rate Equity Securities (CARES) Holders

Size of HoldingNumber of

CARES Holders CARES% of Issued

Securities

1 – 1,000 3,706 1,061,207 40.821,001 – 5,000 213 416,574 16.025,001 – 10,000 17 114,428 4.4010,001 – 100,000 13 388,126 14.93100,001 and over 3 619,665 23.83Totals 3,952 2,600,000 100%

(h) Less than marketable parcels of CARESThe number of CARES held in less than marketable parcels is 1 holder, for a total of 2 CARES.

(i) 20 Largest CARES Holders

NameNumber of fully paid

CARES% of Issued

Capital

1. J P Morgan Nominees Australia Limited 377,968 14.542. Citicorp Nominees Pty Limited 140,261 5.393. Australian Foundation Investment Company Limited 101,068 3.894. National Nominees Limited 97,504 3.755. HSBC Custody Nominees (Australia) Limited 83,675 3.226. IOOF Investment Management Limited (IPS Super A/c) 43,191 1.667. Argo Investments Limited 25,000 0.968. Longhurst Management Services Pty Limited 20,969 0.819. Navigator Australia Limited <MLC Investment Settlement A/C> 20,103 0.7710. Citicorp Nominees Pty Limited (DPSL A/c) 17,811 0.6811. BNP Paribas Nominees Pty Limited 15,488 0.6012. Nulis Nominees (Australia) Limited (Navigator Mast Plan Settlement A/c) 14,434 0.5513. St Hedwig Village 14,000 0.5414. Australian Executor Trustees Limited (No 1 A/c) 13,648 0.5215. Jamplat Pty Limited 12,000 0.4616. Peroda Nominees Pty Limited (Berman Super Fund A/c) 10,293 0.4017. Neweconomy Com Au Nominees Pty Limited (900 A/c) 9,792 0.3818. HSBC Custody Nominees (Australia) Limited 8,409 0.3219. Australian Executor Trustees Limited 8,057 0.3120. Woodduck Pty Limited 8,000 0.31

Totals 1,041,671 40.06

(j) On-Market Buy-BacksThere is no current on-market buy-back in relation to the Company’s securities.

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Corporate DirectoryAS AT 12 SEPTEMBER 2018


DirectorsNon Executive Directors Michael Siddle (Chairman) Peter Evans (Deputy Chairman) Patricia Akopiantz Rod McGeoch AO Kerry Roxburgh Margaret Seale David Thodey AO

Executive Directors Craig McNally (Managing Director & CEO) Bruce Soden (Finance Director & CFO)

Group General Counsel & Company SecretaryJohn O’Grady

Registered OfficeSuite 18.03, Level 18 126 Phillip Street Sydney NSW 2000 Australia

Email: [email protected] Website: www.ramsayhealth.com Telephone: +61 2 9220 1000 Facsimile: +61 2 9220 1001

Share RegistryBoardroom Pty Limited Level 12, Grosvenor Place 225 George Street Sydney NSW 2000 Australia

Email: [email protected] Website: www.boardroomlimited.com.au Telephone Enquiries (from within Australia): 1300 737 760 Telephone Enquiries (from outside Australia): +61 2 9290 9600 Facsimile: +61 2 9279 0664

AuditorErnst & Young 200 George Street Sydney NSW 2000

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Financial ReportRAMSAY HEALTH CARE LIMITED & CONTROLLED ENTITIES A.B.N. 57 001 288 768

OVERVIEW I. RESULTS FOR THE YEAR

II. CAPITAL – FINANCING

III. ASSETS & LIABILITIES OPERATING & INVESTING

IV. RISK MANAGEMENT

V. OTHER INFORMATION

Page 82 Page 89 Page 94 Page 104 Page 120 Page 125

Overview 1. Segment Information

2. Revenue

3. Expenses

4. Dividends

5. Earnings per Share

6. Equity

7. Net Debt

8. Working Capital

9. Business Combinations

10. Property, Plant & Equipment

11. Intangible Assets

12. Impairment Testing of Goodwill

13. Taxes

14. Other Assets/ (Liabilities)

15. Financial Risk Management

16. Share Based Payment Plans

17. Expenditure Commitments

18. Auditors’ Remuneration

19. Related Party Transactions

20. Subsequent Events

21. Information Relating to Subsidiaries

22. Closed Group

23. Parent Entity Information

24. Material Partly-Owned Subsidiaries

FOR THE YEAR ENDED 30 JUNE 2018

35 Directors’ Report

72 Independent Audit Report

76 Directors’ Declaration

77 Consolidated Income Statement

78 Consolidated Statement of Comprehensive Income

79 Consolidated Statement of Financial Position

80 Consolidated Statement of Changes in Equity

81 Consolidated Statement of Cash Flows

82 Notes to the Consolidated Financial Statements

Contents

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